Financial Climate• Assets vs liabilities• Risk reduction• Proposals from advisers• Fiduciary management• Objectives of charity/pension scheme
Political Climate• Government threats re tax relief on charitable donations• “Defined Ambition” schemes concept• Public sector changes
Governance• Recognised as a form of risk reduction• Familiar territory for many charities• Often not difficult• Conflicts of interest must be managed, but rarely removed• Trust Based vs Contract Based provision have different levels of governance
Auto-enrolment• Staging date should be known• Impact on current pension provisions• Impact on current payroll costs• “New” products available – not just NEST• Test cases likely
Actuarial Valuations• Many due this year due to anniversary since first valuation in new regime• Issues likely to be those of three years ago but more complex• Pensions Regulator acknowledges difficulties of current financial climate• Informed decisions must be made.
Employer Covenant• Greater emphasis by Pensions Regulator• “Creative” approaches to date may not stand up to scrutiny• Charity sponsors have particular considerations• Difficult to justify complex forensic investigations tailored to corporate sector
Data• Pensions Regulator provided good practice guidance in June 2010• By end 2012, Common Data should have • 100% accuracy for members joining post June 2012 • 95% accuracy for legacy members
Communication• Awareness of pension higher, although not positive• Auto-enrolment will increase awareness• Need positive spin• Usually most valuable employee benefit after wages.• Manage expectations
Costs• Advisers’ fees receiving some coverage• Lay trustees rely heavily on advisers• How to achieve value for money? • Ask the right questions of right adviser • Charity representatives with right background • Independent trustee
Conclusions• Busy year so far – expected to continue• Auto-enrolment is and will continue to get a lot of attention• Good governance is paramount to avoid detracting from the charity’s objectives
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